Abstract

http://ssrn.com/abstract=2378460
 


 



What's Your Identification Strategy?


Donald E. Bowen III


University of Maryland - Robert H. Smith School of Business

Laurent Frésard


University of Maryland - Robert H. Smith School of Business

Jérôme Taillard


Boston College - Department of Finance

January 13, 2014

Robert H. Smith School Research Paper

Abstract:     
Endogeneity and identification pervade the field of empirical corporate finance. We survey all published articles in the top finance journals across the last four decades to examine the rise of the identification "paradigm" and its consequences. Econometric techniques used to mitigate endogeneity concerns emerge in finance only in the late nineties. In the last decade, there has been a five-fold increase in the number of identification papers which now represents more than half of all empirical corporate research published in the top three finance journals. While several new techniques are entering researchers' toolboxes (e.g. regression discontinuity design), instrumental variables remains the most widespread method to deal with endogeneity. Viewed through the lens of a technology transfer, we find that junior researchers and scholars from leading institutions are more likely to be among the early adopters. Lastly, top economics journal adopt the language of identification almost 10 years before finance.

Number of Pages in PDF File: 58

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Date posted: January 13, 2014  

Suggested Citation

Bowen, Donald E. and Frésard, Laurent and Taillard, Jérôme, What's Your Identification Strategy? (January 13, 2014). Robert H. Smith School Research Paper. Available at SSRN: http://ssrn.com/abstract=2378460 or http://dx.doi.org/10.2139/ssrn.2378460

Contact Information

Donald E. Bowen III
University of Maryland - Robert H. Smith School of Business ( email )
College Park, MD 20742-1815
United States
Laurent Frésard (Contact Author)
University of Maryland - Robert H. Smith School of Business ( email )
College Park, MD 20742
United States
Jérôme Taillard
Boston College - Department of Finance ( email )
Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States
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